Question

A company that manufactures bicycles has a fixed cost of ​$100 comma 000. It costs ​$200 to produce each bicycle. The total cost for the company is the sum of its fixed cost and variable costs. Write the total​ cost, C, as a function of the number of bicycles​ produced, x.​ Then, find and interpret ​

Answer 1

Total cost (TC) = 100,000 + 200X

Step-by-step explanation:

Total cost (TC) = Fixed cost (FC) + Variable cost (VC)

Fixed cost (FC) = 100,000

Variable cost (VC) = 200X

Total cost (TC) = 100,000 + 200X

We have a fixed cost of $100,000 which means that the amount of bicycles produced does not matter, the fixed cost will always be $100,000 (this includes costs such as rental). The variable cost is $200, which means that for each bicycle produced our total cost will increase by $200.